Wednesday, May 30, 2012

Do great businesses start with a plan? The answer is "no" according to Anthony Tjan.

Tjan says that 70% of businesses with a successful exit (that is, an IPO or sale to another firm) did NOT start with a business plan. Tjan, CEO and Managing Partner of the venture capital firm Cue Ball, discovered this information while researching the forthcoming book that he is co-authoring --Heart, Smarts, Guts, and Luck. He and his colleagues interviewed and surveyed hundreds of successful entrepreneurs around the world to see what it takes to be a successful entrepreneur and build a really successful business.

...their business journeys originated in a different place, a place we call the Heart. They were conceived not with a document but with a feeling and doing for an authentic vision. Clarity of purpose and passion ruled the day with less time spent writing an idea and more time just doing it."

Though I believe in business plans, I believe that the dream must come first. It is the vision that leads to the development of the business plan. The well written plan, with well defined systems, leads to successful implementation...which results in a successful business. This pathway avoids the 80%+ failure rate of the typical entrepreneurs.

Though this sounds radical, you will hear much the same thoughts from Michael Gerber, author of The E-Myth Revisited. In the above video, Gerber describes how the entrepreneur goes through a four step process that starts with a dream and ends with implementation.